Correlation Between Fluent and Global Payout

Can any of the company-specific risk be diversified away by investing in both Fluent and Global Payout at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Fluent and Global Payout into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fluent Inc and Global Payout, you can compare the effects of market volatilities on Fluent and Global Payout and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Fluent with a short position of Global Payout. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluent and Global Payout.

Diversification Opportunities for Fluent and Global Payout

0.02

Correlation Coefficient

Fluent  Global Payout

Significant diversification

The 3 months correlation between Fluent and Global is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Fluent Inc and Global Payout in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Payout and Fluent is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Fluent Inc are associated (or correlated) with Global Payout. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Payout has no effect on the direction of Fluent i.e., Fluent and Global Payout go up and down completely randomly.

Pair Corralation between Fluent and Global Payout

Given the investment horizon of 90 days Fluent is expected to generate 147.06 times less return on investment than Global Payout. But when comparing it to its historical volatility, Fluent Inc is 11.62 times less risky than Global Payout. It trades about 0.01 of its potential returns per unit of risk. Global Payout is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  0.02  in Global Payout on December 1, 2024 and sell it today you would earn a total of  0.00  from holding Global Payout or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Fluent Inc  vs.  Global Payout

Fluent Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fluent Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Fluent is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Global Payout

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global Payout are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Global Payout exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fluent and Global Payout

The main advantage of trading using opposite Fluent and Global Payout positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluent position performs unexpectedly, Global Payout can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Global Payout will offset losses from the drop in Global Payout's long position.

The idea behind Fluent Inc and Global Payout pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.